Geopolitical conflicts "ignite" oil prices, with many domestic stocks hitting the daily limit! Institutions: Response is more important than prediction

Cailian Press, February 24 (Editor: Wang Wei) During the recent Spring Festival holiday, the global geopolitical landscape has once again become tense, especially in the Middle East, where the situation has attracted widespread attention from the international energy market.

Progress in the US-Iran nuclear negotiations remains limited. Meanwhile, the United States announced an increase in military forces in the Middle East, and Iran conducted large-scale military exercises near the Strait of Hormuz. These series of actions are interpreted by the market as signs of escalating confrontation, further fueling investors’ concerns about potential disruptions to global oil supplies.

Influenced by these factors, international crude oil futures markets showed a volatile upward trend during the holiday period. As of February 24, according to Wind data, WTI crude oil was trading at $66.87 per barrel, up 17.07% since the beginning of the year; ICE Brent crude was trading at $71.61 per barrel, with a year-to-date increase of 19.27%. The strong performance of these two benchmark oils reflects the market’s reassessment of supply-side risks.

Data source: Wind, Cailian Press compilation Buoyed by the strong international oil prices, the first trading day after the holiday saw a rally in related sectors of the A-share market. Stocks closely related to oil and gas exploration, services, and production performed particularly well. Several related stocks such as CNOOC Services, Sinopec Oilfield Services, and Intercontinental Oil & Gas hit the daily limit. Overall, the upstream resources, oil exploration, and oil service equipment sectors led the gains, becoming one of the main market hotspots of the day.

Several institutions have issued opinions on recent market trends. Huaxi Securities’ macro fixed income team stated in their research report that before the holiday, there was significant concern about US-Iran conflict-related funds, but during the holiday, both sides maintained restraint. Even if conflict erupts, it would mainly be a one-time shock to oil prices and risk appetite, which should be more important than pre-judged impacts.

Researcher Chen Dong from Baocheng Futures analyzed in his report that in the short term, domestic crude oil futures are likely to show a strong opening with high volatility. Key factors to watch include OPEC+’s follow-up production cuts, US inventory data, and developments in Middle Eastern geopolitics. If the geopolitical conflict does not escalate further and combined with a slowdown in the global economic recovery, oil prices may face downward pressure at high levels; conversely, if supply disruption risks increase, there is room for further upward movement in oil prices.

Huang Guiren, analyst at Hualian Futures, also stated that the fundamentals show OPEC+ will pause production increases in the first quarter. The latest EIA Short-Term Energy Outlook projects global oil demand in 2026 at 104.8 million barrels per day, consistent with previous forecasts.

OPEC maintains its forecasts for global oil demand growth in 2026 and 2027 (138,000 barrels/day and 134,000 barrels/day respectively). In January, OPEC+’s total crude oil production averaged 42.45 million barrels per day, a decrease of 439,000 barrels per day from December.

In Huang Guiren’s view, global oil inventories remain relatively high. During the holiday period, geopolitical tensions in the region remained unstable, with escalations between the US and Iran. The second round of negotiations ended without substantive progress, and attention is now on the next round of talks.